Finance chief says another lease deal up for review

FINANCE Secretary Carlos G. Dominguez III flagged on Thursday another lease contract that will be up for review, adding to the list of agreements between the state and the private sector that the government found to be disadvantageous.

Mr. Dominguez said in a forum in Makati City yesterday that according to a report from a state-led financial institution, a certain leasing contract was renewed even though the lessor did not put up a structure that had been agreed by the parties.

“Yesterday, there was a report to me by one of our financial institutions that they got into a contract to lease a piece of property so that lessor will put up a certain structure there. That lessor did not put up that structure. And yet the lease was renewed. For a very low rate again,” he told the participants of the forum.

He said he had ordered his staff to look and review all the contracts with that lessor that will expire in April.

However, he said there were no details that can be disclosed yet as the review of the contract is still ongoing.

“You think with this administration, should sit down and say, well that was the way it was done in the past we will go ahead, you forgot the basis of why this admin was elected. We said we wanted to change,” he said.

Last week, Mr. Dominguez bared another contract with alleged “onerous” provision, this time with oil firm Chevron Philippines Inc.’s more than four-decade old lease deal which according to their computations allowed the firm to pay lower-than-market value in rental fees.

“So what I said… we will no longer renew the lease without competitive bidding. And they said: ‘Oh no we don’t want a competitive bidding.’ So I said: ‘In that case, our partnership can be dissolved.’ So we will close the corporation, we will buy you out, we will pay you for the value of the property, for your 40%, right? And then we will bid it out but in a transparent and a public way,” he said.

Through this, he said the public will be able to maximize the taxes they pay instead of “subsidizing” a company “that has been in effect subsidized for 44 years.”

Currently, the government is drafting a revised contract with the two water concessionaires to eliminate the “onerous” provisions that are said to be disadvantageous to the public. — Beatrice M. Laforga